Slope of Hope Blog Posts

Slope initially began as a blog, so this is where most of the website’s content resides. Here we have tens of thousands of posts dating back over a decade. These are listed in reverse chronological order. Click on any category icon below to see posts tagged with that particular subject, or click on a word in the category cloud on the right side of the screen for more specific choices.

Discernment and Denouement

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If there's anything I learned from the (miserable) experience of largely missing the March-Present run-up, it is this: trying to "out-think" the charts is stupid. If you look at a chart, and technically it make sense, and if you're a practicing technician………..well, you should take action! What I did was looked at the charts and talked myself out of it.

I face the same quandry with DIG. It's a great inverted head and shoulders pattern. Period. Therefore I'm buying it. A huge asterisk next to it is the disintegrating volume, but that's just the first of the "talk myself out of it" actions happening. I could also think about how it doesn't make sense for energy to be hot in a slumping world economy, or how the dollar is bound to push higher any day now. The list could go on and on; there are always to talk yourself out of a trade.

But I've got the chart. I've got the stop. I'm in the position. And I'm going to leave it alone unless it's stopped out. Because I need to let the chart do the talking, and not my brain.

1012-dig

Longs I Bought

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Here are the longs I bought today (grudgingly……..) with their stop prices. Their patterns are in many cases inverted head & shoulders with a pretty clean neckline, good volume, and plenty of room on the upside. All the same, I bought these as a hedge, and in this market, I held my nose doing so.

ACI 22.06 AMB 21.17 CMCSA 15.06 CPX 11.67 CROX 6.65 FWLT 30.3 HON 36.21 OEH 10.39 PCX 12.44 PETS 18.39 VMW 41.59 WNR 5.84

Trading Tax Gains Momenum

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OCTOBER 12, 2009
 
Democrats Weigh Tax On Financial Transactions By JOHN D. MCKINNON (WSJ) WASHINGTON -- Taxing financial transactions on Wall Street is gathering support
in high places. 

With federal budget deficits soaring, policy makers and other advocates are
eyeing the huge sums that could be raised as a way to cover the costs of new
initiatives.
Labor unions, in particular the AFL-CIO, have proposed a financial-transactions
tax as a way to defray costs of a health-care overhaul. 

Lawmakers have discussed
a similar fee as a way to cover the cost of future financial oversight. Liberal
advocates are pushing the tax to pay for new stimulus spending.
This week, the left-leaning Economic Policy Institute floated the idea of a
national transaction tax that would raise $100 billion to $150 billion a year.
The tax, at a rate of 0.1% to 0.25% of the value of the trade, would be levied
on all financial transactions such as stock trades, but not on consumer
transactions such as with credit cards. 

The money would be used initially to pay for temporary aid to states, hiring
incentives for public- and private-sector employers and school construction
money.
"We are in a difficult time right now, so people are looking at every
opportunity to
gain some revenue to fund" new initiatives, said Rep. Stephen
Lynch (D., Mass.), a member of the House Financial Services Committee. "Because
I was one of the first to suggest using this to fund [new] regulatory
infrastructure, folks have come to me and said, 'That's a good idea; I've got a
better one: Why don't we use it for stimulus or especially health care?'" 

One Democratic aide said the idea is under consideration among House leadership,
though the discussions are preliminary.
A spokeswoman for Republican House leader John Boehner of Ohio criticized the
idea. "How is killing more American jobs by stifling capital investment, further
eroding families' savings and diverting much-needed investment out of the United
States a good idea during a severe economic downturn?" said the spokeswoman,
Antonia Ferrier. 

Unnoticed by many, the concept already has found its way into federal law. At
the urging of House Democratic leaders, last year's $700 billion
financial-bailout bill contains a provision requiring the president to submit
legislation to "recoup" from the financial-services industry any eventual
shortfall in the Troubled Asset Relief Program, or TARP.
The provision, inserted during last-minute negotiations, was encouraged by
moderate Democrats who worried that taxpayers would be left footing the bill if
the government investment produced big losses.
Transactions taxes first were proposed in the 1970s for currency trading, to
reduce v
olatility in exchange rates. 

The idea later was seized on as a way to
reduce volatility in financial systems.
In an interview Friday, Rep. Barney Frank, chairman of the House Financial
Services Committee, said he supported the legislation's idea of recouping future
losses from the industry.
"I was one of the ones who suggested" the idea for the TARP provision, said the
Massachusetts Democrat. He said he didn't specifically propose a
financial-transactions tax. The provision could be structured as either a tax or
a fee, he said, and could be a one-time provision rather than a permanent tax.
That would make it less likely that parties to financial transactions would seek
to escape the tax by moving activity to another country. He said imposing such a
tax "country by country...would be a problem."
Many economists have argued against a financial-transactions tax on policy
grounds, saying it could have consequences for markets, in part by driving
activity outside the U.S. Critics said it also would throw sand in the gears of
capital markets. 

Still, some appear to be changing their minds. "I'm not as hostile as I used to
be," said Len Burman, a Syracuse University professor and former head of the Tax
Policy Center, a venture of the left-of-center Brookings Institution and Urban
Institute. Curbing frequent trading might be a good idea, he said, though he is
"skeptical this is the best way to do it."
Mr. Frank s
aid additional fees might be imposed on financial-industry
participants such as payday lenders in order to pay for a consumer-protection
agency.
Fees to pay for regulatory activities aren't considered a tax under House rules.
The new fees would be relatively minor, he said, adding that details haven't
been worked out. Similar fees already help pay for the operations of some
agencies such as the Securities and Exchange Commission. 

A broader question is whether levies on the financial industry might be used to
help establish a rescue fund for future calamities.
In response to a question at a House hearing in September, White House economic
adviser and former Federal Reserve Chairman Paul Volcker said it "might be
interesting" if Congress ordered a study of the idea of a transactions tax. But
he pointed to the problem of driving transactions to other countries. "That's
the No. 1 problem; you'll have to get some consistency internationally," he
said. 

Trade unions are backing the idea to reduce government deficits and pay for new
jobs initiatives, among other purposes. Amid their urging, the Group of 20
industrial and developing nations recently pushed the International Monetary
Fund to study the idea, which has drawn endorsements from some leaders in the
U.K. and Germany. 

Two Sides of the Coin

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I did an exhaustive – and exhausting – examination of all my individual stock charts until well past 3 this morning. Unlike some instances, it wasn't a matter of finding only bearish ideas (perhaps I'm having a more open mind these days): I found about 45 bullish ideas and about 85 bearish ones.

But this is a week fraught with both risk and opportunity, since it is jam-packed with important earnings reports. Just one of them, Intel (INTC), reports after Tuesday's close, and that's massively important. Investors want to see if there's any reality to the green shoots or not.

I was pleased at all the positive feedback I got about Fujisan's post yesterday (although I got one email about it which was downright rude – you can't please all the people). I'm glad for her contribution, and I look forward to many more!